Cabot - you really couldn't make this up.

[removalman]

Re: Cabot - you really couldn't make this up.

A massive thank you to everyone who took the time to express a view on this matter.

Cabot have not been in touch with me since December, and whilst I'm sure it may not have gone away for ever I do wonder if they Cabot legal team remain undecided on the merits of pursuit.

Anyway, given that the debt was clearly in dispute at the time Clarity were dealing with this matter surely it should never have been passed onto Cabot in the first place? Is that a valid additional line of argument to convery to Cabot when I write to them to formally request the default recorded as satisfied?

Perhaps I'm just clutching at straws but any additional ammunition would be welcome.

Regards,

Removalman.

[cappo]

Re: Cabot - you really couldn't make this up.

A massive thank you to everyone who took the time to express a view on this matter.

Cabot have not been in touch with me since December, and whilst I'm sure it may not have gone away for ever I do wonder if they Cabot legal team remain undecided on the merits of pursuit.

Anyway, given that the debt was clearly in dispute at the time Clarity were dealing with this matter surely it should never have been passed onto Cabot in the first place? Is that a valid additional line of argument to convery to Cabot when I write to them to formally request the default recorded as satisfied?

Perhaps I'm just clutching at straws but any additional ammunition would be welcome.

Regards,

Removalman.

i,d just try that stance with them r.m it,s worth a try and as db says if you have the time and patience to go the full mile with it you might well triumph in the end. all you can do is give it a go,good luck,everyone on here is with you and will help you all they can.

[jax007]

Re: Cabot - you really couldn't make this up.

The other thing from your thread, it would appear that the cheques were your own. Had they been from a third party then you would be on firmer ground. Had they not informed you immediately but still proceeded to cash the cheques then they would have made a legally binding agreement with the third party as to the terms contained within the covering letter NOT YOU. Hence they have no cause of action.

Can someone please explaine the reason behind this - what difference does it make if from a third party or the debtor personally???

And ... if the cheque was from a third party and they cashed it - would that legally be the end of the matter??

[Garlok]

Re: Cabot - you really couldn't make this up.

Hi jax,

As I said I am trying hard to put together a write up to complement what is on site already which should clarify things a bit more.

As regards your specific question, whilst there are NO hard and fast rules from the case law dating right back to 1602 it has become established that if the cheques proffered in an F & F are from a third part by way of an ex gratia payment to clear your debt (covering letter with all the conditions you want detailed) AND the creditor cashes those cheques without informing you immediately that he does not acccept your offer, then he (the creditor) has entered into a fully absolute legally binding agreement with your third party benefactor, NOT YOU.

Again do not do these things on your own, always but always get a professional to do it for you then the whole thing has been handled by third parties and your own involvement is at an absolute minimum.

This is a very simplistic overview.

best regards
Garlok.

[Garlok]

Re: Cabot - you really couldn't make this up.

Sorry jax,

Also forgot to say it might be worth your while having a look at what advice is given to creditors in these circumstances. There are a couple of solicitors sites on the web which have bits of interesting information on F & Fs and the obligations creditors have.

Try Addleshaw Goddard Solicitors and Gannons London Solicitors. It may clear the thinking a bit for you.

regards
Garlok

[debtisbad]

Re: Cabot - you really couldn't make this up.

Hi jax,

As I said I am trying hard to put together a write up to complement what is on site already which should clarify things a bit more.

As regards your specific question, whilst there are NO hard and fast rules from the case law dating right back to 1602 it has become established that if the cheques proffered in an F & F are from a third part by way of an ex gratia payment to clear your debt (covering letter with all the conditions you want detailed) AND the creditor cashes those cheques without informing you immediately that he does not acccept your offer, then he (the creditor) has entered into a fully absolute legally binding agreement with your third party benefactor, NOT YOU.

Again do not do these things on your own, always but always get a professional to do it for you then the whole thing has been handled by third parties and your own involvement is at an absolute minimum.

This is a very simplistic overview.

best regards
Garlok.

Hi garlok

Overall good advice, however, I did the full and final settlement cheques and letters myself, without the expense of a lawyer or inconvenience of involving a third party and it worked for me. Natwest and MBNA debts written off-again mid-nineties, so maybe today's climate is different. By the way, thanks for a well-researched answer and for taking the time to look back to the 17th century case law.

[Garlok]

Re: Cabot - you really couldn't make this up.

Hi debtisbad

Thank you for your comments. I think that whilst the case law has not changed a lot since Stour Valley and Lloyd LJ in the C of A, the climate probably has with the ascendancy of the debt collection agency business and the despicable process of selling debts.

Hence it is my own very humble view that holding the settlement watertight is the main problem. The banks themselves have no ethics left either. In our own case we have proper long on going disputes with Barclaycard now with solicitors acting for us. At a time that our business account was overdrawn but not up to its agreed limit, BC stripped this account up to and above the agreed limit and tried to charge us for the privilege. The cards were actually paid fully up to date at the time of their actions. They even tried to divert merchant services money to themselves as well.

I wanted to get our affairs in order with this account and close it down along with the remnants of a business loan hence the research. I was worried that should anything at all be paid into these accounts then it would just be swallowed up, unlawfully in my opinion, by BC exercisiing an unwarranted Right to Set-Off.

The researches I did before approaching our sols to see if there was any mileage in offering an F & F suggested that if this was not done properly I could effectively lose the money and subsequently be pursued for the remainder. I could not allow that to happen hence for the cost of three letters and the settlement we expected to pay 70 -80%. Sols paid 10% end of. Worth every penny of the costs.

regards
Garlok

[jax007]

Re: Cabot - you really couldn't make this up.

Again do not do these things on your own, always but always get a professional to do it for you then the whole thing has been handled by third parties and your own involvement is at an absolute minimum.

Thanks Garlok - I get what you say - just wonder what the reasoning is behind it all.

When you say professional - I'm assuming you mean legal professionals and not just a family member/friend or such??

Also do you know the timescale they have to come back to you to say they don't accept the F&F??

Thanks again

[Pinky69]

Re: Cabot - you really couldn't make this up.

I have made 2 F&F's and put all my conditions in the offer letter, including not selling the debt on and not recording any defaults in my credit records - the offer would be unacceptable to me unless all conditions were met and confirmation made of the creditors acceptance. They confirmed in writing that my conditions were acceptable to them. I then sent them 3rd party cheques, which they banked, after which they wrote to me to say that the debt was settled and for the avoidance of doubt the accounts were closed and my contractual obligations to them had been completed.

In my view the keys to a binding F&F are 1)not to make one until they have agreed to your conditions and you have their acceptance in writing and that they accept these conditions as a contract for F&F settlement. 2) the third party cheque. Any cheque from yourself could just be seen as another payment, as indeed it was.

You cannot make unilateral F&F. They must agree to it.

[debtisbad]

Re: Cabot - you really couldn't make this up.

You cannot make unilateral F&F. They must agree to it.

Agreed, but if, as I did, you write on the letter and the back of the cheques, very clearly, do not cash unless you accept this payment as f+f, etc, or similar words, then they accept the deal by cashing. At least, that is what happened to me and there was nothing else they could do. They disappeared. This is based on actual fact, not theory, it really happened.

[Garlok]

Re: Cabot - you really couldn't make this up.

Hi Guys by way of clarification here are a couple of quotes from legal websites advising creditors:-

"In Stour Valley there was some disagreement over the amount outstanding after some building works had been carried out. The customer decided to send a cheque for a lower amount than that claimed by the builders and stated in his letter that the amount was in full and final settlement of all claims. The cheque arrived on day 1. The builders cashed the cheque and it cleared on day 5. On day 7 the builders spoke to the customer and told him that the amount could not be accepted in full and final settlement. This delay of seven days was not considered fatal and it was held that the builders were entitled to treat the cheque as a payment on account.
Lloyd LJ considered that cashing the cheque would always be strong evidence of acceptance, especially where an immediate rejection of the offer is not forthcoming. As far as a creditor is concerned, therefore, the communication of the rejection must occur "within a few days" for it to be valid. In this case a delay of one week fell within this band. In another case a delay of seven weeks (8) was found to be too long and accord and satisfaction was established. It appears, therefore, that the correct question to ask is whether the creditor's conduct caused the debtor to think that the money was accepted in satisfaction."

"In Bracken v Billinghurst an employer who had been awarded £45,000 as the result of an adjudication, told the building contractor on the other side that it would accept just £6,000 in settlement of this award. The other side decided to send a cheque to the employer for £5,000 in full and final settlement. However, in this case the covering letter stated that if the offer was not accepted the employer should return the cheque.
Timing was key in this case as two weeks passed before the employer cashed the cheque and wrote to the contractor rejecting the offer in settlement and furthermore stated that it would pursue them for the total award. The court held that this was too long a period for it to have held the cheque and not informed the contractor of its intentions. This delay, combined with the clear terms set out in the contractor's letter, meant that there had been accord and satisfaction (i.e. the debt had been settled at only £5,000).
This last case highlights the dangers present in this area and the importance of acting quickly. One cannot treat a sum received as a payment on account without informing the other party of this intention sufficiently quickly. Where you are the party making the lower offer you should be as clear as possible about the terms on which the cheque may be cashed."

Again I would re-iterate my concerns about holding the whole thing watertight which was an absolute essential in our case for the reasons I have given.

regards
Garlok

[debtisbad]

Re: Cabot - you really couldn't make this up.

When I sent my cheques and letters, the cheques were always cashed quickly by the banks. The letters were always dealt with separately by another department. For example, a greasy haired, spotty faced, 16 year old is given the job of opening tons of mail. Cheques are cashed. Letters are sent to other jobs-worths. However, in my own case, for both MBNA and Natwest, it always took them 2 to 3 weeks to respond, as they considered cashing cheques to be more important than responding to letters. Therefore, the system at that time, mid-ninties, was absolutely beautiful for sending such F+F offers. Not sure what the situation is today, since I have not resorted to this recently!

[Garlok]

Re: Cabot - you really couldn't make this up.

Hi jax,

I have posted up a couple of quotes from legal sites which give a precis of the most quoted case law other than Pinnel of 1602.

However by professional I mean practising solicitor, debt management programme operator etc. preferably the legally qualified option.

Lloyd LJ in Stour Valley made a distinction between settlements made directly between client/creditor and those made by a "lawyer". I will admit that I am unclear as to the exact distinction in law but by implication of the context, my opinion is that should the settlement and its conditions subsequently come before the courts for any number of reasons, then settlements dealt with by "lawyers" would carry far more weight on the debtors behalf with the court.

Any number of reasons could be the cause of action, and I hate banging on about it BUT you could be hauled before the courts to pay the remainder of the debt (remember they sell debts on) at any time in the future. It is likely that the premise will be the infamous Pinnel case of 1602 whereby the Court of Appeal opined that the debt can NEVER be discharged by a settlement which is less than what is owed to the creditor (case involved settlement by of goods in kind etc).

There is much subsequent case law and rmember well that you are not dealing in F & Fs with relatively simple CCA law. You are straight into the Common Law of Contract and the cost implications of fighting a rearguard action sometime in the future are enormous.

I need peace of mind not the hassle.

regards
Garlok

[Garlok]

Re: Cabot - you really couldn't make this up.

Yes fully agreed debtisbad,

I do think and would have alluded to that later, that it is true that there are systemic failures and weak management structures within these large financial institutions which allow for low F & Fs to be set in concrete and I am sure the professionals exploit this just as much.

many have little to do with the law as such.
regards
Garlok

[jax007]

Re: Cabot - you really couldn't make this up.

Thanks Garlok - very informative.

I guess back in the days when debts weren't sold we were probably on a surer footing with potential F&Fs. Again, if F&F is offered, cheque cashed (according to terms of letter, etc) - I can see you could end up in a legal minefield should the debt subsequently be sold on.

Something to ponder over ......................